Political economy of third party interventions

Sabyasachi Das, Souvik Dutta and Abhirup Sarkar

Journal of Public Economics, 2021, vol. 195, issue C

Abstract: The paper examines political economy consequences of a third party (World Bank) intervention in India. The intervention was a capacity building initiative that trained local politicians in various governance procedures in a sample of villages. We show that the state government reacted to the intervention by allocating additional resources to program villages with aligned incumbents. Consequently, party switching by opposition incumbents in favor of the ruling party went up significantly in program villages. Moreover, the reelection rate of opposition party incumbents went down due to the intervention, especially for those who didn’t switch parties. The results highlight the importance of considering political economy consequences of such interventions, even in countries not heavily reliant on foreign assistance, to better understand their overall welfare effects.

Keywords: Policy evaluation; Party switching; Reelection; Gram Panchayat (search for similar items in EconPapers)
JEL-codes: D72 D78 H43 H72 H77 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Political Economy of Third Party Interventions (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:195:y:2021:i:c:s004727272030195x

DOI: 10.1016/j.jpubeco.2020.104331

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